5 Recent Spectacular Startup Disasters

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The first rule about entrepreneurship is that it’s okay to fail. In fact, it’s expected. Even if your business venture isn’t a hair-brained get-rich-quick scheme (many, if not most are), even if you have intelligence, capital, and a good idea, odds are you’ll end up going back to the drawing board and starting over from scratch. This process is so necessary that it’s venerated — there is an implied grace in the failure of a startup that doesn’t exist in the failure of, say, a bank.

But this doesn’t mean that there aren’t any spectacular failures in the world of startups. Especially during the crazy days of the dot-com boom there was a lot of money going to under-developed ideas and dubious entrepreneurs, and the frenetic pace of business development in the new Internet era led to some pretty enormous failures. You know how it goes: the bigger they get, the harder they fall.

Venture capital database CB Insights compiled a list of major startup failures. Of the thousands of startups that flare to life and fade away into bankruptcy or are absorbed into a competitor, these were among the most expensive. Each raised hundreds of millions of dollars in funding, and promptly lost it all, leaving investors and sometimes creditors in the lurch.